-CSL- Carlisle Companies Reports 33% Increase in Net Income on Record First Quarter Sales
CHARLOTTE, N.C.--April 14, 2003--Carlisle Companies Incorporated reported first quarter net earnings of $17.1 million, or $.56 per share (diluted) on record first quarter net sales of $476 million.Net sales in the first quarter 2002 were $455 million. First quarter 2003 net earnings were 33% above the $12.8 million, or $.42 per share (diluted), realized in the first quarter 2002, before the impact of a change in accounting principle required under SFAS 142. The implementation of SFAS 142 in 2002 resulted in a $43.8 million (net of income tax) reduction in the carrying value of goodwill and a charge to net earnings of $1.43 per share (diluted). The change in accounting principle, which was effective January 1, 2002, resulted in a net loss of $(31.0) million or $(1.01) per share in the first quarter 2002.
The Construction Materials segment accounted for most of the increase in net sales and included $10 million of incremental sales from the acquisition of MiraDri in October 2002 and Hunter Panels in March 2002. Most of the improvement in the first quarter 2003 net earnings was generated by the Industrial Components and General Industry segments.
Richmond McKinnish, Carlisle's President and CEO said, "The first quarter results were in line with our expectations and reflect the actions taken in 2002 to improve performance. We reaffirm our 2003 net earnings guidance of $2.60 to $2.80 per share provided in February of this year."
Segment Highlights
The Industrial Components segment first quarter net sales of $165 million were 4% above the first quarter 2002 net sales of $159 million. First quarter 2003 net sales at Carlisle Tire & Wheel Company were 11% higher than in 2002 with most of the increase occurring in the lawn and garden, and ATV markets. Carlisle Power Transmission's net sales were below its first quarter 2002 net sales primarily as a result of selling its European power transmission business in December 2002. First quarter 2003 earnings before interest and taxes ("EBIT") of $19.1 million was 14% above the $16.8 million realized in the first quarter 2002, as a result of continued improvements at Carlisle Tire & Wheel Company.
Construction Materials net sales of $98 million in the first quarter 2003 were 16% above the first quarter 2002 as a result of acquisitions completed in March and October of 2002 and growth in private label sales and the residential rubber tile roofing business. Acquisitions accounted for 75% of the increase in net sales. First quarter 2003 EBIT of $6.3 million was 19% below the first quarter 2002 EBIT. Lower earnings at Carlisle's roofing joint venture in Europe accounted for most of the decrease in segment EBIT.
Automotive Components net sales of $56 million in the first quarter were down 11% from $63 million realized in the first quarter 2002. The decline in net sales reflects lower North American vehicle production at the major automotive manufacturers that are supplied by Carlisle Engineered Products. Segment EBIT of $3.1 million decreased 24% from the first quarter 2002. The decline is the result of lower sales and reduced production levels.
Beginning in the first quarter 2003, Carlisle's custom molder of thermoset plastic components is included in the Specialty Products segment to reflect a change in reporting responsibilities and the realignment of operations. This operation was previously included in the General Industry (All Other) segment. The 2002 segment information has been adjusted to reflect this change. Net sales in the Specialty Products segment of $32 million were 3% above $31 million realized in the first quarter 2002. Most of the markets served by the operations in this segment continue to remain soft, with some improvement in the heavy industrial friction and consumer product markets. Segment EBIT of $1.4 million compares favorably to the slight loss realized in the first quarter 2002. The unfavorable results in the first quarter 2002 were primarily the result of lower production volume and the realignment and start-up of new production facilities at Carlisle Motion Control.
Transportation Products net sales of $28 million were slightly above the first quarter 2002 net sales in spite of rising fuel costs and the weak economy. EBIT of $0.9 million in the first quarter 2003 was higher than $0.2 million recorded a year ago and reflects the elimination of the unprofitable pneumatic product line and improved production efficiencies.
General Industry net sales of $96 million were 5% above $91 million recorded in the first quarter 2002, with EBIT of $5.0 million significantly improved from $0.7 million realized in the first quarter 2002. Net sales at the Carlisle Walker Group were 38% above the first quarter 2002 net sales with most of the increase occurring at Carlisle Life Sciences and Johnson Truck Bodies. Carlisle FoodService net sales were 4% above the first quarter 2002 net sales. Net sales at Tensolite were slightly lower than in the first quarter 2002, with improved sales of its HDSI (High-Density Shielded Interconnect) product line and sales of RF flexible cable assemblies offset by the downturn in the commercial aircraft industry. Carlisle Process Systems first quarter 2003 net sales were 21% less than a year ago. Most of the improvement in segment EBIT was generated at the Carlisle Walker Group, Tensolite, and Carlisle Process Systems operations.
Cash Flow
Cash flow from operations in the first quarter was negative $18.7 million compared to negative $4.2 million in the first quarter 2002. Higher accounts receivable at Carlisle Tire & Wheel and Carlisle SynTec, and higher inventories at Carlisle SynTec accounted for most of the increase in working capital in the first quarter 2003. The increase in receivables from year-end is in line with higher sales, and the increase in inventories is in anticipation of increased sales demand in the second quarter. Capital expenditures of $10.0 million were slightly below $10.8 million in the first quarter of 2002. Total cash flow in the first quarter 2003 was negative $8.4 million, an improvement to the first quarter 2002's negative cash flow of $12.3 million. Free cash flow (cash from operating activities, less dividends, capital expenditures and the effect of the Company's securitization program) was negative $35.3 million and compares to negative free cash flow of $8.0 million in the first quarter 2002.
Reconciliation of Net Cash Used In Operating 1st 1st
Activities to Free Cash Flow Qtr. Qtr.
2003 2002
----------------------------------------------------------------------
Net Cash Used in Operating Activities (18.7) (4.2)
Dividends (6.6) (6.4)
Capital Expenditures (10.0)(10.8)
Accounts Receivable Securitization Program 0.0 13.4
------------
Free Cash Flow (35.3) (8.0)
============
Backlog
The March 31, 2003 backlog of $312 million is 16% above $270 million at March 31, 2002 and is above the December 31, 2002 level of $305 million. Most of the increase is at Carlisle Life Sciences, Johnson Truck Bodies and Carlisle Process Systems.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to changes in global economic, business, competitive, market and regulatory factors. More detailed information about these factors is contained in the Company's filings with the Securities and Exchange Commission. The Company undertakes no duty to update forward-looking statements.
Carlisle is a diversified global manufacturing company serving the transportation, construction, commercial roofing, automotive, pharmaceutical, foodservice, data transmission, and specialty tire and wheel industries.
CARLISLE COMPANIES INCORPORATED
March 31, 2003
FINANCIAL RESULTS
(In millions, except per share data)
First Quarter
2003 2002 % Change
------- ------- --------
Net sales $475.7 $455.1 5%
Earnings before accounting
change 17.1 12.8 33%
Change in accounting principle - (43.8) 100%
------- -------
Net earnings (loss) $ 17.1 $(31.0) 155%
======= =======
Per share amounts before
accounting change
Basic earnings per share $ 0.56 $ 0.42 33%
Diluted earnings per share $ 0.56 $ 0.42 33%
Per share amounts after
accounting change
Basic earnings per share $ 0.56 $(1.01) 155%
Diluted earnings per share $ 0.56 $(1.01) 155%
Dividends per share $0.215 $0.210 2%
2003 SEGMENT FINANCIAL DATA
(In millions)
First Quarter
2003 2002
Sales EBIT Assets Sales EBIT Assets
------ ----- -------- ------ ----- --------
Industrial
Components $165.3 $19.1 $455.9 $158.5 $16.8 $508.4
Construction
Materials 98.4 6.3 266.6 84.9 7.8 239.9
Automotive
Components 56.3 3.1 114.4 62.8 4.1 129.5
Specialty
Products* 31.6 1.4 85.8 30.5 - 87.5
Transportation
Products 28.1 0.9 54.6 27.6 0.2 57.9
General Industry* 96.0 5.0 310.5 90.8 0.7 312.0
------ ----- -------- ------ ----- --------
Subtotal $475.7 $35.8 $1,287.8 $455.1 $29.6 $1,335.2
Corporate - (5.5) 75.4 - (4.9) 40.1
------ ----- -------- ------ ----- --------
Total $475.7 $30.3 $1,363.2 $455.1 $24.7 $1,375.3
* A thermoset plastic molding operation, included in the General
Industry segment in 2002, is now included in the Specialty Product
segment to reflect changes in reporting responsibility and realignment
of manufacturing processes. 2002 has been revised to reflect this
change.
CARLISLE COMPANIES INCORPORATED
Comparative Balance Sheet
-------------------------
As of March 31
(In thousands)
2003 2002
----------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $ 14,638 $ 3,289
Receivables 181,458 244,453
Inventories 274,609 246,952
Prepaid expenses and other 66,532 74,071
----------------------------------------------------------------------
Total current assets 537,237 568,765
----------------------------------------------------------------------
----------------------------------------------------------------------
Property, plant and equipment, net 444,998 451,931
Other assets 380,917 354,586
----------------------------------------------------------------------
$1,363,152 $1,375,282
=============================
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt, including current
maturities $ 79,032 $ 28,748
Accounts payable 143,734 141,484
Accrued expenses 138,005 116,007
----------------------------------------------------------------------
Total current liabilities 360,771 286,239
----------------------------------------------------------------------
----------------------------------------------------------------------
Long-term debt 292,248 464,122
Other liabilities 143,721 121,107
Shareholders' equity 566,412 503,814
----------------------------------------------------------------------
$1,363,152 $1,375,282
=============================
CARLISLE COMPANIES INCORPORATED
Consolidated Statement of Earnings
-------------------------------------------
For the periods ended March 31
(In thousands except per share data)
First Quarter
2003 2002 % Change
----------------------------------------------------------------------
Net sales $475,688 $455,101 4.5%
----------------------------------------------------------------------
Cost and expenses:
Cost of goods sold 385,520 371,720 3.7%
Selling and administrative expenses 51,941 51,844 0.2%
Research and development expenses 4,805 5,160 -6.9%
Other (income) & expense, net 3,088 1,639 88.4%
----------------------------------------------------------------------
Earnings before interest & income taxes 30,334 24,738 22.6%
Interest expense, net 4,630 5,149 -10.1%
----------------------------------------------------------------------
Earnings before income taxes 25,704 19,589 31.2%
Income taxes 8,611 6,758 27.4%
----------------------------------------------------------------------
Income before cumulative effect of
change in accounting principle 17,093 12,831 33.2%
----------------------------------------------------------------------
% of Net Sales 3.6% 2.8%
Cumulative effect of change in accounting
principle, net of taxes of $12,072 - (43,753)
----------------------------------------------------------------------
Net income (loss) 17,093 (30,922) 155.3%
======================================================================
Basic earnings per share
-------------------------------------------
Income before cumulative effect of
change in accounting principle $0.56 $0.42 32.1%
Cumulative effect of change in acct
principle - (1.43)
----------------------------------------------------------------------
Net income (loss) $0.56 $(1.01) 155.6%
======================================================================
Diluted earnings per share
-------------------------------------------
Income before cumulative effect of
change in accounting principle $0.56 $0.42 33.3%
Cumulative effect of change in acct
principle - (1.43)
----------------------------------------------------------------------
Net income (loss) $0.56 $(1.01) 155.4%
======================================================================
Average shares outstanding (000's) - basic 30,608 30,292
----------------------------------------------------------------------
Average shares outstanding (000's) -
diluted 30,705 30,434
----------------------------------------------------------------------
Dividends $6,561 $6,358
----------------------------------------------------------------------
Per share $0.215 $0.210 2.4%
----------------------------------------------------------------------
CARLISLE COMPANIES INCORPORATED
Comparative Consolidated Statement of Cash Flows
----------------------------------------------------
For the periods ended March 31
(In thousands)
First Quarter
2003 2002
----------------------------------------------------------------------
Operating activities
Net earnings $17,093 $(30,922)
Reconciliation of net earnings to cash flows:
Goodwill impairment, net of tax - 43,753
Receivables under securitization program - (13,362)
Gain on property, equipment and business,
net - (27)
Depreciation and amortization 15,258 15,406
Loss on equity investments 2,635 1,567
Working capital (54,468) (18,777)
Other 750 (1,806)
----------------------------------------------------------------------
Net cash used in operating activities (18,732) (4,168)
----------------------------------------------------------------------
Investing activities
Capital expenditures (9,982) (10,757)
Acquisitions, net of cash (1,494) (1,026)
Proceeds from sale of property, equipment and
business - 47
Other 1,015 (1,093)
----------------------------------------------------------------------
Net cash used in investing activities (10,461) (12,829)
----------------------------------------------------------------------
Financing activities
Net change in short-term debt and revolving
credit lines 25,994 10,848
Reductions of long-term debt (876) (412)
Dividends (6,561) (6,358)
Treasury shares and stock options, net 979 1,975
----------------------------------------------------------------------
Net cash provided by financing activities 19,536 6,053
----------------------------------------------------------------------
Effect of currency translation adjustment 1,254 (1,373)
----------------------------------------------------------------------
Change in cash and cash equivalents (8,403) (12,317)
Cash and cash equivalents
Beginning of period 23,041 15,606
----------------------------------------------------------------------
End of period $14,638 $3,289
----------------------------------------------------------------------